Putting the blame where it belongs

John Quiggin23 Comments

Queensland Premier Anna Palaszczuk has followed Bill Shorten in blaming privatisation for the woes of the electricity network. She’s basically right, although there’s much more wrong with the National Electricity Market than that.

Equally importantly, in terms of getting a good outcome, she’s on a political winner in the fight with the Turnbull government and particularly the Abbott faction pulling Turnbull’s strings.

No one fully understands what’s going wrong with energy policy, but Australians love renewable energy and hate privatisation. Both of these judgements are validated by experience. Renewable energy has overdelivered on its promises while privatisation has (at best) undelivered and more commonly made matters worse. So, the idea that the LNP can win the debate on energy policy by bashing renewables and attacking public ownership as socialism seems pretty implausible.

A rare outbreak of unanimity on PFI

John Quiggin13 Comments

I’m doing some work on privatisation and wanted to look at recent UK experience with the Private Finance Initiative. So, I Googled for PFI in the last year (as Google personalizes searches, your mileage may vary). The result is a surprising degree of unanimity. Across the political spectrum, there is agreement that

* PFI is a disaster, enriching private firms at the expense of the public
* The other side is (mostly) to blame

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The result is in the mail

John Quiggin24 Comments

We got our equal marriage survey forms in the mail yesterday, and posted them back today. From what I’ve seen, about half the forms were delivered last week and nearly all will be done by Friday. And I imagine, most people will either respond straight away or not at all. So, it was kind of strange to see the official campaigns being launched at the weekend, rather as if an ordinary election campaign started at lunchtime on election day*.

On the other hand, the results won’t be announced until November, and the ABS is working hard to prevent any release of partial information. That’s if the votes were kept under lock and key on election night and not counted until the last postals and absentees had come in.

In these circumstances, I’m hoping for the slow-motion version of an exit poll. Next week, any pollster so minded could survey people to ask if and how they voted. We wouldn’t have the problem, which affected pre-survey polling, of unpredictable turnout, so the results should be as accurate as an ordinary opinion poll (that is, a 95 per cent confidence interval of plus or minus 2-3 percentage points for a sample of 1-2000). Is anyone going to do this, I wonder?

* For byzantine funding reasons, the major parties now leave their election launch until the week before election day, when quite a few people have already voted. But this is taking it a step further.

The opportunity cost of the Melbourne Grand Prix

John Quiggin37 Comments

Last Sunday, my wife Nancy and I had a great weekend in Mooloolaba, where I took part in the Ironman 70.3 event, along with a thousand or so other competitors from around Australia and the world as well as hundreds of spectators. As Nancy said, even though the Sunshine Coast isn’t far from Brisbane, we’d never get around to going if there weren’t an event like this, but the beautiful setting makes us keen to return.

While I was there, a friend mentioned that the Melbourne Ironman event had been cancelled because the date of the Grand Prix had changed, producing a clash. That got my mind away from transition times and back to economic policy.
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Shorten changes the game on electricity

John Quiggin64 Comments

Somewhat lost in the noise surrounding yesterday’s High Court decision on the equal marriage survey was Bill Shorten’s statement that privatisation of the electricity industry in the 1990s was a major contributor to the current disaster. He’s essentially correct, though ‘privatisation’ has to be taken as shorthand for ‘the process of disaggregation and market reform of which privatisation was a central part’. I’ve been over this ground many times, including here and here, and have argued that renationalisation is the only solution.

Unsurprisingly, there’s been pushback from the Oz, which ran a piece headlined ‘Bill Shorten’s power play debunked” with the lead ‘Bill Shorten’s claim that the electricity crisis has been driven by privatisation has been dismissed by business leaders and energy experts,’.

It’s remarkably lame job.

The only business leader quoted is Tony Shepherd, formerly of the BCA, and last seen heading the disastrous Commission of Audit. Next up is Labor deserter, Michael Costa, followed by Jeff Kennett. Both Shepherd and Costa are climate denialists, which instantly destroys their credibility. Costa and Kennett have already had their privatisation policies rejected by voters, so it seems unlikely that their criticism will scare Shorten. In fact, he’s already hit back*

The only serious expert quoted is Tony Wood, but he doesn’t really help the Oz. He’s quoted as saying “Grattan Institute energy director Tony Wood rejected privatisation as the cause of the energy market crisis. He said 15 years of political disagreement on climate change policy and regulated monopolies in the electricity distribution networks were contributors to the current electricity crisis. He also pointed to the fact that in Queensland, the Palaszczuk government in June was forced to order its state-owned power generator Stanwell to pursue lower profits during heatwaves because of spikes in power prices.”

The first point is accurate enough, but the point about Queensland proves the opposite of what the Oz wants us to believe. It’s only because Stanwell is publicly owned that the Palaszczuk government can order it not to exploit the mess that is the National Electricity Market.

Turning to the politics of the issue, Shorten’s recasting of the debate is going to cause Turnbull a lot of problems. He’s made energy a central issue,, and is convinced that it’s a winner for the government. And, having attacked Shorten as wanting to turn Australia into North Korea, they can scarcely leave the privatisation debate.

This is likely to be disastrous for the government. Not only is privatisation politically toxic, but the government has already undermined any possible credibility on the issue with speculation that it will finance a new coal fired power station, along with Snowy 2.0 and other interventions. Once the debate moves on to the real issue of the failure of market reform, the culture war rhetoric on which the government has relied so far will be totally irrelevant.

* We shoudn’t pay too much attention to comments threads but it’s notable that even the Oz commentariat, almost uniformly made up of rightwing climate denialists, is far from united in support of privatisation.